STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

1. R. GRACE & CO., et al., )

   )

   Petitioner, )

   )

   vs. ) CASE NO. 77-2174RP

   ) DEPARTMENT OF NATURAL RESOURCES, )

   )

   Respondent. )

   )

   
   

   FINAL ORDER

   
   

   The Petitioners, pursuant to Section 120.54(4), Florida Statutes, challenge the validity of a rule proposed by the Department of Natural Resources which implements Section 376.11, Florida Statutes; specifically, the taxation of the transfer of pollutants. This matter was submitted to the undersigned Hearing Officer by stipulation of facts which obviated the necessity of taking testimony. Petitioner operates a facility which transfers anhydrous ammonia from ship to shore in Hillsborough County. The Petitioner is substantially affected by the proposed rule in that the Department takes the position that the proposed rule will require the Petitioner to pay tax on the transfer of ammonia. Section 376.11, Florida Statutes, gives the Department the power to levy an excise tax for the privilege of operating a terminal Facility and handling pollutants covered by that chapter. Section 376.031, Florida Statutes, defines "pollutant" as "Oil of any kind and in any form, gasoline, pesticides, ammonia, chlorine, and derivatives thereof."

   
   

   APPEARANCES

   
   

   For Petitioner: John Radey, Esquire

   
   

   For Intervenor: J. D. Boone Kuersteiner, Esquire For Respondent: Stephen H. Barber, Esquire

   The rule proposed by the Department has been designated 16B-16.19 which states in pertinent part:

   
   

   1. Pursuant to Section 376.11(4)(a), Florida Statutes, the Excise Tax to be paid by and collected from each registrant for the privilege of operating a terminal facility and the handling of anhydrous liquid ammonia is hereby set at an initial rate of sixteen and seventy-four hundredths cents ($.1674) per short ton which corresponds to the rate of two cents ($.O2) per barrel for other pollutants covered in that law.

The Petitioners argue that the legislature could not have intended to include anhydrous ammonia when they gave the Department of Natural Resources the power to impose an excise tax upon pollutants and that the rate of the tax is set at $.O2 per barrel which is defined at 42 U.S. gallons at 60 F (Section 376.031(3), Florida Statutes).

The parties have stipulated that the Petitioners transfer anhydrous ammonia (NH3) at its terminal facility and that when this is accomplished normally the ammonia is at the approximate temperature of 28 F. The argument presented by the Petitioners is that the legislature could not have intended to tax anhydrous ammonia as a pollutant since it gasifies at an extremely low temperature and is not transferred as a liquid at 60 F. Further, since it is not transferred at that temperature the Petitioners maintain the statement in the proposed rule that the rate of $.1674 per short ton corresponds to $.02 per barrel is erroneous.

Regarding the first point Presented by the Petitioners, it is difficult to conceive how the statute could be stated any more clearly. Pollutants are defined to include ammonia and the derivatives thereof. The Petitioners operate facilities which transfer ammonia. To give the Statute the construction urged by the Petitioners would be to ignore the clear language of the law. If the legislature only intended to place an excise tax upon ammonium, which is the compound of ammonia and water, commonly referred to as "ammonia water" it would have been expected to indicate that in the statutes.

With regard to the Department's formula for relating short tons of ammonia to an equivalency in barrels, it is the responsibility of Petitioners to carry the burden of proof and demonstrate that such formula is erroneous. Balino v. Dept. of Health and Rehabilitative Services, 34a So.2d 349 (Fla. 1st DCA 1977).

The Petitioners have not presented adequate proof from which one could draw the conclusion that the Department's formula stated in its rule is inaccurate.

Merely because anhydrous ammonia is normally transferred at a temperature below

60 F cannot be held to be cause for holding the proposed rule invalid. particularly in light of the clear mandate in Chapter 376 that the Department may impose an excise tax upon the transfer of ammonia and its derivatives. It is therefore

ORDERED:

That the petition is DENIED.

DONE and ORDERED this 22nd day of February, 1978, in Tallahassee, Florida.

KENNETH G. OERTEL

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 22nd day of February, 1978.

COPIES FURNISHED:

John Radey, Esquire Holland and Knight

P. O. Drawer 810 Tallahassee, Florida 32302

Stephen H. Barber, Esquire Asst. Dept. Attorney

Department of Natural Resources Crown Building, Room 230

202 Blount Street Tallahassee, Florida 32304

J. D. Boone Kuersteiner, Esquire McKenzie Panebianco & Kuersteiner

P. O. Box 1200

Tallahassee, Florida 32302

Docket for Case No: 77-002174RP

Orders for Case No: 77-002174RP